Thursday, May 31, 2012

Reuters: U.S.: Murder suspects who broke out of Arkansas jail apprehended

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Murder suspects who broke out of Arkansas jail apprehended
Jun 1st 2012, 04:52

By Suzi Parker

LITTLE ROCK, Arkansas | Fri Jun 1, 2012 12:52am EDT

LITTLE ROCK, Arkansas (Reuters) - Two murder suspects who used a hacksaw to break out of their second-story cell in an Arkansas county jail were apprehended on Thursday after a four-day manhunt, authorities said.

The Miller County Sheriff's Office said on Thursday that murder suspect Quincy Vernard Stewart, 36, and his cell mate Cortez Rashod Hooper, 23, were back in the county jail, but gave scant details on how they were tracked down.

The pair escaped on Monday after using a hacksaw to remove bars on their cell, according to authorities. After removing the bars and smashing through a pane of glass, the two men then shoved mattresses through the window and escaped.

Authorities later arrested Stewart's mother and brother, accusing them of providing the hacksaw and a cellphone to aid in the breakout.

Stewart's brother, Edward George Dailey, 34, was charged with furnishing implements of escape. Their mother, Charlene Stewart, was also charged with furnishing implements for escape.

Quincy Stewart had been in jail for possessing a controlled substance and was to be turned over to authorities in neighboring Bowie County, Texas, on suspicion of capital murder.

His cell mate Hooper was charged with first-degree murder, aggravated assault and a probation violation when he escaped.

(Reporting by Suzi Parker; Editing By Cynthia Johnston and Todd Eastham)

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Reuters: U.S.: Wisconsin recall tests conservative's ground game

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Wisconsin recall tests conservative's ground game
Jun 1st 2012, 05:05

By Nick Carey

OCONOMOWOC, Wisconsin | Fri Jun 1, 2012 1:05am EDT

OCONOMOWOC, Wisconsin (Reuters) - Robin Milaeger whoops for joy and punches her fist in the air when the man at her door asks if she wants a yard sign supporting Wisconsin's Republican governor, Scott Walker, who faces a contentious recall election on June 5.

"I was wondering when you would show up," Milaeger says to Mike Kozaria, who is canvassing voters in her conservative neighborhood in Oconomowoc, some 30 miles west of Milwaukee. "Walker promised he'd make tough choices to fix Wisconsin and he kept his word."

When Kozaria asks if she would volunteer to help re-elect Walker, Milaeger says she wants to call voters on his behalf.

Kozaria, who works for conservative group American Majority Action, enters Milaeger's details into his smartphone using a new get-out-the-vote application called Gravity - which the group provides free to Tea Party activists - that uploads the information to a central database.

"We're not here to convince people," says Kozaria, 18, of his presence in this right-leaning art of Oconomowoc, a town of around 16,000 people. "We're here to make sure the right people get out to vote."

American Majority Action is one of several national groups that specialize in working with grassroots activists and are campaigning on Walker's behalf in the special election. The vote, which could oust the governor from office, follows a petition backed by Democrats and labor unions opposing a law passed soon after Walker took office in 2011 that curtails the power of public-sector unions.

Grassroots organizing has often been neglected by the Republican Party establishment, which has traditionally relied more on advertising to reach voters. But the Internet and social media like Facebook have enabled individualistic conservatives to link up with politically like-minded people, and a thriving industry of volunteer political groups has arisen in recent years.

The organizations that cater to this new class of conservative activists will have seen their funding grow at least sevenfold since 2008, to $140 million, if 2012 fundraising estimates from conservative groups such as Americans for Prosperity (AFP) provided to Reuters prove accurate.

Re-electing Walker is a crucial test for them in a presidential and congressional election year.

"This is the epicenter of all we do," said Luke Hilgemann, Wisconsin state director of AFP, which is funded by Charles and David Koch, the billionaire brothers who own oil and gas conglomerate Koch Industries. It has invested more than $10 million in the state since February 2011.

Wisconsin is shaping up to be a semifinal match in the get-out-the-vote tournament, with the final being the November presidential election, which is expected to be close.

A Walker victory would be highly symbolic for the right. Conservatives respect and fear the "ground game" labor unions use to get Democrats out to vote, above all in the manufacturing state of Wisconsin. So a win for Walker, who has maintained a single-digit lead in polls over his Democratic opponent, Milwaukee Mayor Tom Barrett, would be seen as a major conservative victory.

"The envy of the whole grassroots movement has always been the unions," said Matt Kibbe, president of FreedomWorks, which is headed by former Republican House Majority Leader Dick Armey. "In Wisconsin, we face the best of the best."

But successfully marshaling a grassroots activist army in Wisconsin is about more than just bragging rights. It would also help bring in more money for conservative grassroots efforts ahead of November's U.S. presidential election.

"Even if they don't like him, it could be these guys who push (Republican presidential candidate Mitt) Romney over the line," against Democratic U.S. President Barack Obama, said Republican strategist Ford O'Connell.

"They have taken a bet on Wisconsin and now have to deliver the results to get more money," O'Connell, chairman of the CivicForum political action committee, said.

But Republicans may pay a price for a conservative base that is not merely energized but organized. The party "establishment" has been forced to the right of the political spectrum by the Tea Party and may have to tack further right to appease grassroots activists.

"If Republicans see these groups can deliver, they will be more likely to cave in to some of their demands," O'Connell said.

RAPIDLY GROWING INDUSTRY

Before the 2008 election few voters or donors knew of AFP, FreedomWorks or American Majority, which together raised a little under $23 million that year.

The advent of the Tea Party movement shortly after President Obama took office in early 2009 brought them many thousands of Americans willing to do the unpaid work of going door-to-door for conservative causes.

In a mad dash before the 2010 midterm elections, with get-out-the-vote training, phone bank software and yard signs, conservative activists helped Republicans take the majority in the U.S. House of Representatives plus state 20 state legislative chambers from Alabama to New Hampshire.

That helped raise money. Based on statements from representatives of AFP, Tea Party Patriots - a Tea Party umbrella group that was founded in 2009 and raised $12.2 million in 2011 - plus American Majority and FreedomWorks, these conservative groups are on track to raise at least $140 million in 2012.

AFP expects to raise $100 million of that total.

See Factbox.

A May 30 Politico article said "Koch-related organizations" plan to spend around $400 million ahead of the election.

"There has been a big change over the last four years," AFP's Phillips said. "Donors have become more generous because they realize we are more philosophical than political and can go into neighborhoods like never before."

"Donors appreciate it when you fight on the issues and you do so effectively," he added.

UNIQUE TEST RUN

Wisconsin's recall election is a "unique opportunity" for both sides because it is a high-profile race in a battleground state before the presidential election, said Charles Franklin, a professor of law and policy at Marquette University in Milwaukee.

Nearly as many Republicans as Democrats showed up to vote in the May 8 primary. While Milwaukee Mayor Tom Barrett received 58 percent in the competitive Democratic primary, Walker took nearly 97 percent in what was billed an uncompetitive primary.

Local conservative groups are doing their own thing. The Racine, Wisconsin Tea Party, for instance, has formed a political action committee to fund a June 2 rally in support of Walker and local Republican state Senator Van Wanggaard, who is also facing recall for supporting Walker.

But national groups are pouring resources into the race. In the days running up to the election, AFP will boost its staff in Wisconsin to 60 from seven and will hold a bus tour as part of its effort to galvanize conservatives.

American Majority Action provided Reuters with a Web tutorial on Gravity, an app that allows grassroots leaders to identify registered Republican voters in a neighborhood and set up walking lists with on-foot directions for activists. It can also be used to call voters over the Internet at low cost.

When Mike Kozaria approaches a home in Oconomowoc, his phone tells him the names of the registered voters there and prompts him to mark whether there is a yard sign out front.

Using Gravity, Kozaria asks his respondents which issue matters most - the economy, debt, immigration, healthcare or education - with a follow-up question based on their answer. While Tea Party activists get Gravity free, American Majority Action gets access to the first three answers in any survey.

Raz Shafer of American Majority Action, who provided the Gravity tutorial, said elected officials who have used it say the technology enables them to reach up to four times as many voters compared to old-fashioned printed walking lists.

AFP declined to show Reuters its proprietary voter database application, called Themis, but said it is broadly like American Majority's Gravity. Both said their application should give the edge to conservatives in get-out-the-vote drives.

Tea Party Patriots is making its first major foray into a single state race here, paying travel and accommodation costs for some 100 Tea Party activists from around the country to go door-to-door in the three weeks leading up to June 5. Co-founder Jenny Beth Martin is among them.

All these groups have volunteers calling Wisconsin voters.

Tea Party Express, associated with longtime Republican strategist Sal Russo, will also visit Wisconsin just before the recall election as part of a multistate bus tour.

Marquette University's Franklin says a victory for either side will be laden with symbolism.

"If conservatives can demonstrate they can go toe-to-toe with the unions, it will be a major boost for them," he said. "But if the unions win, they can say, 'Look, we took all these lumps and we're still standing."

(Reporting by Nick Carey; Editing by Douglas Royalty)

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Reuters: U.S.: Sandusky lawyers asks appeals court for sex-abuse trial delay

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Sandusky lawyers asks appeals court for sex-abuse trial delay
Jun 1st 2012, 04:17

Former Penn State assistant football coach Jerry Sandusky (L) gets out of a car with his wife Dottie (2nd R) as he arrives for a preliminary hearing to determine if there is enough evidence to hold him for trial on charges of sexually abusing boys, at the Centre County Courthouse in Bellefonte, Pennsylvania, December 13, 2011.

Credit: Reuters/Jonathan Ernst

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Reuters: U.S.: San Diego eighth grader wins National Spelling Bee with "guetapens"

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San Diego eighth grader wins National Spelling Bee with "guetapens"
Jun 1st 2012, 02:59

Snigdha Nandipati, 14, of San Diego, California, holds her trophy after winning the Scripps National Spelling Bee at National Harbor in Maryland May 31, 2012. REUTERS/Kevin Lamarque

1 of 6. Snigdha Nandipati, 14, of San Diego, California, holds her trophy after winning the Scripps National Spelling Bee at National Harbor in Maryland May 31, 2012.

Credit: Reuters/Kevin Lamarque

By Ian Simpson

WASHINGTON | Thu May 31, 2012 10:59pm EDT

WASHINGTON (Reuters) - Snigdha Nandipati, a 14-year-old eighth grader from San Diego, won the Scripps National Spelling Bee on Thursday by correctly spelling "guetapens," a French word for an ambush.

Second place went to Stuti Mishra, a 14-year-old eighth grader from Orlando, Florida, who finished in second place after misspelling "schwarmerei," a German word for excessive enthusiasm.

Arvind Mahankali, a 12-year-old seventh grader from Bayside Hills, New York, finished third for a second year in a row after failing to spell "schwannoma," a kind of nerve cell tumor.

The three were among nine finalists winnowed from 278 contestants who started the spelling contest on Wednesday.

The finalists were among the survivors of the 50 young spellers aged 10 to 14 who started Thursday's semi-final rounds and were tripped up by words including "tendenz," a literary term, and "polynee," a type of pastry.

The tense competition took place onstage at the Gaylord National Resort and Convention Center in National Harbor, Maryland, just south of Washington.

The audience, filled with families, was tense as the young contestants haltingly spelled words well above the reading levels of their respective grades in school.

The spellers employed a range of strategies, from writing out words on the palms of their hands with their fingers to asking for a word's language of origin.

The final competition was aired live on the ESPN Sports network.

Nandipati, who reads encyclopedias for pleasure, won a $30,000 cash prize, a $2,500 U.S. savings bond and a $5,000 scholarship, among other prizes.

Several spellers who had been favored to do well stumbled on Thursday.

Ten-year-old Vanya Shivashankar of Olathe, Kansas, the younger sister of 2009 champion Kavya Shivashankar, misspelled "pejerrey," a type of fish.

Six-year-old Lori Anne Madison of Woodbridge, Virginia, the youngest participant ever to qualify for the bee, failed to make it past the preliminary round after incorrectly spelling the word "ingluvies," the crop of a bird or insect.

Jacques Bailly, the 1980 Bee champion and the official pronouncer of the Bee, read the words for contestants in the final round.

Last year's winner was 14-year-old Sukanya Roy from South Abington Township, Pennsylvania, who spelled "cymotrichous," used to describe having wavy hair.

(Reporting by Lily Kuo; editing by Greg McCune and Todd Eastham)

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Reuters: U.S.: Illinois lawmakers put off vote on pension reforms

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Illinois lawmakers put off vote on pension reforms
Jun 1st 2012, 02:56

By Andrew Stern

SPRINGFIELD, Illinois | Thu May 31, 2012 10:56pm EDT

SPRINGFIELD, Illinois (Reuters) - Illinois lawmakers on Thursday put off a vote on proposed changes to its vastly underfunded public employee pension system, risking further credit rating downgrades of the state.

Tom Cross, the Republican leader of the state House of Representatives, announced that too few House Democrats would support the current form of the legislation so he had agreed with Governor Pat Quinn not to call for a vote on it.

"We have to be willing to find some common ground," a weary-sounding Cross told fellow lawmakers. "We need to let emotions settle down."

Quinn, a Democrat, has insisted that lawmakers use the legislative session scheduled to end on Thursday to pass reforms to pensions and Medicaid, the joint federal-state healthcare program for the poor, to keep the two huge budget items from consuming even more than their current 39 percent of state general fund spending.

The governor said he will convene a meeting with legislative leaders next week to forge an agreement so lawmakers can return soon to session to pass it.

"We have made great headway on stabilizing our pension system and we are very close to a solution, but we are not there yet," Quinn said in a statement.

Democrat Representative Elaine Nekritz said beyond concerns about a credit rating downgrade of the state, necessary payments to the pension system would climb next year.

Lawmakers in the Democrat-controlled General Assembly have passed legislation that contains elements of Quinn's $2.7 billion Medicaid plan, including $1.6 billion in program cuts and other changes and a $1-a-pack cigarette tax increase.

On Thursday, a measure that limits how much in Medicaid obligations the state can push from one fiscal year into the next year for payment was also sent to the governor. Those obligations would be limited to $700 million in fiscal 2013 and $100 million in fiscal 2014.

But dealing with Illinois' huge $83 billion unfunded pension liability by Thursday's midnight deadline for the current session proved to be a thornier issue as lawmakers tried to navigate state constitutional protections for existing benefits.

The state's liability has been building for years as Illinois skipped or skimped on pension payments and fund investments fell.

Democratic House Speaker Michael Madigan proposed, and then dropped, a measure in the pension reform bill that would have phased out state payments for local teachers' pensions, potentially forcing school districts to hike property taxes.

Madigan removed himself as the bill's sponsor, and Cross was named sponsor, a sign that Madigan would no longer support the measure.

The core reform left in the legislation essentially required current and retired workers to choose between a cut in cost-of-living increases for their retirement payments and access to retiree health insurance.

Cross repeatedly said on Thursday the state could see its already relatively low bond ratings fall further if it fails to rein in pension costs.

Standard & Poor's Ratings Services has warned of a multiple-notch downgrade in Illinois's A-plus rating if progress is not made to address fiscal problems that include unfunded pensions and a structural budget deficit fueled by billions of dollars in unpaid, overdue bills.

In January, Moody's Investors Service dropped Illinois' bond rating to A2, the lowest level among the states it rates, citing legislative inaction in dealing with underfunded pensions and unpaid bills.

Labor union officials raised objections to all of the pension reform bill versions, labeling them unconstitutional.

(Additional reporting and writing by Karen Pierog in Chicago; Editing by Lisa Shumaker)

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Reuters: U.S.: 14-year-old from San Diego wins Scripps National Spelling Bee

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14-year-old from San Diego wins Scripps National Spelling Bee
Jun 1st 2012, 02:18

Thu May 31, 2012 10:18pm EDT

(Reuters) - Snighda Nandipati, a 14-year-old eighth grader from San Diego, won the Scripps National Spelling Bee on Thursday by correctly spelling "guetapens," a French word for ambush.

The second-place finisher was Stuti Mishra, a 14-year-old eighth-grader from Orlando, Florida. Arvind Mahankali, a 12-year-old seventh-grader from Bayside Hills, New York, repeated as third-place finisher for the second year in a row.

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Reuters: U.S.: Seattle shooting "hero" threw stools at gunman: police

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Seattle shooting "hero" threw stools at gunman: police
Jun 1st 2012, 01:55

Flowers sit outside the Cafe Racer after Wednesday's deadly shooting incident in Seattle, Washington, May 31, 2012. A gunman killed four people at the popular Seattle cafe on Wednesday then fled to a downtown parking lot where he killed a fifth person and stole her car before shooting himself in the head as police closed in, authorities said. REUTERS/Robert Sorbo

1 of 8. Flowers sit outside the Cafe Racer after Wednesday's deadly shooting incident in Seattle, Washington, May 31, 2012. A gunman killed four people at the popular Seattle cafe on Wednesday then fled to a downtown parking lot where he killed a fifth person and stole her car before shooting himself in the head as police closed in, authorities said.

Credit: Reuters/Robert Sorbo

By Cynthia Johnston

Thu May 31, 2012 9:55pm EDT

(Reuters) - When Ian Stawicki started shooting at a Seattle cafe in a spree rampage that would leave him and five others dead, one man stood up and tried to stop him by hurling coffeehouse stools at the gunman, police said on Thursday.

A day after the shootings in the Cafe Racer, police said the actions of that man - whom they are not naming - ultimately saved three lives and were a bright spot in a violent series of events that ended when Stawicki shot himself in the head.

Seattle Assistant Police Chief Jim Pugel described the shooting, which was caught on video, as erupting seemingly without warning amid typical mid-morning coffeehouse activity.

"Some folks are reading, others are sipping coffee, they are jocular, they are exchanging conversation, then the person comes in, looks around, sits down, you can see there's some interaction between him and the barista," Pugel said.

"One person stands up, looks like he's going to go outside for a minute. At that point, the suspect stands up and starts shooting."

Seattle Mayor Mike McGinn has said the killing spree, following a recent rash of other shootings, had shaken the city and he urged fellow municipal leaders to "bring an end to this gun violence that the city is seeing."

But Pugel said "there is a hero" who saved lives, describing him as a man sitting next the gunman who intervened when the shooting happened at the coffee house known for its live music in Seattle's Ravenna neighborhood.

"The hero picked up a stool and threw it at the suspect, hit him, picked up another stool as the suspect is shooting, and now pointing at him, and hits him with another stool," he said.

Pugel did not name the man.

"During that time, two or possibly three people made their escape," Pugel said, adding that the gunman had been between those people and the door. "So he saved three lives."

ACTING ERRATICALLY

Police said that roughly half an hour after the late-morning cafe shooting, in which four people died, the gunman fatally shot a woman and stole her sport utility vehicle in another part of the city, before ultimately abandoning it, leaving one of his two guns inside.

Police have given little explanation for the bloodshed. But Stawicki was known to frequent the cafe and reportedly had quarreled during previous visits with two of the people he shot, neighborhood residents told local TV station KIRO-7.

Stawicki has also been described as mentally disturbed, and police said an acquaintance he contacted after the cafe shooting told police he was talking nonsense.

"This former acquaintance did not know what had happened and was completely unaware of the news. This acquaintance said that he was acting erratically, talking nonsense. And this acquaintance broke off the contact," Pugel said.

Once the acquaintance heard news of the shooting, that person contacted police. When police finally tracked Stawicki down, he knelt and shot himself in the head, police said.

The father of the gunman, Walter Stawicki, said he knew his son "had issues," but that he woke up the morning of the shooting in a good mood with plans to help his girlfriend move her mother to another home, according to the Seattle Times.

"He wasn't a loose cannon. We knew he had issues," Stawicki told the paper, saying his son had faced mental illness since he was in his 20s. "We were more afraid a trucker would come at him with a fist because he was so provocative."

"I'm grieving for him, I'm grieving for his mother, I'm grieving for his brother," Stawicki said of his eldest son, who he said had long had a concealed weapons permit.

"I'm grieving for six other families."

(Reporting by Cynthia Johnston; editing by Alex Dobuzinskis and Todd Eastham)

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Reuters: U.S.: Ex-Senator Edwards acquitted on campaign finance charge

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Ex-Senator Edwards acquitted on campaign finance charge
Jun 1st 2012, 00:41

Former U.S. Senator John Edwards (2nd L) makes a statement with his daughter, Cate Edwards (L), father Wallace Edwards, and mother Bobbie Edwards (R) after the jury reached a verdict at the federal courthouse in Greensboro, North Carolina May 31, 2012. Jurors acquitted former U.S. Senator John Edwards on one count of taking illegal campaign contributions on Thursday and the judge declared a mistrial on five other counts because the jury was deadlocked. REUTERS/John Adkisson

1 of 3. Former U.S. Senator John Edwards (2nd L) makes a statement with his daughter, Cate Edwards (L), father Wallace Edwards, and mother Bobbie Edwards (R) after the jury reached a verdict at the federal courthouse in Greensboro, North Carolina May 31, 2012. Jurors acquitted former U.S. Senator John Edwards on one count of taking illegal campaign contributions on Thursday and the judge declared a mistrial on five other counts because the jury was deadlocked.

Credit: Reuters/John Adkisson

By Colleen Jenkins

GREENSBORO, North Carolina | Thu May 31, 2012 8:41pm EDT

GREENSBORO, North Carolina (Reuters) - Former U.S. Senator John Edwards was acquitted on Thursday on one count of accepting illegal campaign contributions, and the judge declared a mistrial on five other counts because the jury was deadlocked.

The jury's decision came on the ninth day of deliberations and marked yet another dramatic turn of events for the one-time politician who rose to become the Democratic Party's vice presidential nominee in 2004, only to see his career ruined by scandal four years later.

As the jury's verdict was read, Edwards, who did not testify in the nearly six-week-long trial, slumped back in his seat in relief.

Later, standing in front of the federal courthouse in Greensboro, North Carolina, the state he represented in the U.S. Senate from 1999 to 2005, Edwards said he never broke the law.

"While I do not believe I did anything illegal, or ever thought I was doing anything illegal, I did an awful, awful lot that was wrong, and there is no one else responsible for my sins," he said, flanked by his parents and oldest daughter, Cate.

"I am responsible, and if I want to find the person who should be held accountable for my sins, honestly I don't have to go any further than the mirror. It's me. It is me and me alone."

Federal prosecutors did not make clear whether they would seek another trial for Edwards, who they accuse of taking funds from two wealthy donors during his 2008 presidential campaign to keep voters from learning he was cheating on his cancer-stricken wife, Elizabeth, who died in 2010.

Jurors found Edwards not guilty of accepting illegal campaign contributions from one of those supporters, Rachel "Bunny" Mellon, in 2008.

But they were deadlocked on a similar count of receiving illegal campaign money from Mellon in 2007; two counts of accepting illegal campaign money from friend and supporter Fred Baron; one count of conspiring to solicit illegal campaign funds; and one count of failing to report the donor payments as campaign contributions.

The defense said all along that the supporters' money was meant as a personal gift to shield Elizabeth Edwards from her husband's indiscretions, not to influence the election.

Asked on Thursday how he felt following the acquittal and mistrial, Wallace Edwards, the former senator's father, pointed at the smile on his face. "This says it all," he said.

The Justice Department will likely weigh the political risk and expense as they decide whether to retry the case, said Elon University assistant law professor Michael Rich.

"I'm sure that they will spin it that a hung jury simply indicates that they had a strong case but couldn't convince a couple of reticent jurors," Rich said. "I do think we saw their strongest case, and it just wasn't enough."

Earlier in the day, the jury announced it had reached a verdict on a single charge and could not reach a unanimous decision on the other counts. U.S. District Judge Catherine Eagles sent the jurors back for more deliberations, but they soon came back and said they were deadlocked, prompting Eagles to declare the mistrial on five counts.

The panel was considering whether Edwards, 58, violated election laws as he sought to cover up his affair with videographer Rielle Hunter and her pregnancy with his child during the 2008 campaign for the Democratic presidential nomination. The child, Quinn, is now 4 and lives with Hunter in Charlotte.

The two-time presidential hopeful who served as the Democrats' 2004 vice presidential nominee faced possible prison time and fines if found guilty of any of the six felony counts.

The charges included conspiring to solicit the money, receiving more than the $2,300 allowed from any one donor, and failing to report the payments as contributions.

Hampton Dellinger, a North Carolina lawyer who attended the trial, said Edwards' gutsy decisions to turn down a reported plea offer and skip taking the stand had paid off.

"There's no question he drove the defense strategy," Dellinger said. "He made tough call after tough call, and it worked out for him."

(Additional reporting by Ellen Wulfhorst and Dan Trotta; Editing by Paul Thomasch and Anthony Boadle)

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Reuters: U.S.: Coke, McDonald's slam NYC bid to ban big soda cups

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Coke, McDonald's slam NYC bid to ban big soda cups
Jun 1st 2012, 00:39

By Martinne Geller

NEW YORK | Thu May 31, 2012 8:39pm EDT

NEW YORK (Reuters) - Coca-Cola Co and McDonald's Corp slammed a proposed limit on soft drink sales in New York City that would turn a small McDonald's drink into the new large and could trigger a wave of similar restrictions aimed at curbing obesity.

"New Yorkers expect and deserve better than this. They can make their own choices about the beverages they purchase," Coca-Cola said in a statement on Thursday. Coke dominates the U.S. fountain drink market, and would likely be the most hurt.

On Wednesday, Bloomberg proposed amending the city's health code to ban the sale of soft drinks in cups larger than 16 ounces, a size equal to what McDonald's calls small. The chain's medium is 21 ounces, and its large is 32 ounces. Its kids' size is 12 ounces.

"This raises the specter of this going to other cities as well," said Bernstein Research analyst Ali Dibadj. "These companies may have to start playing whack-a-mole if this gains momentum."

Heather Oldani, a spokeswoman for McDonald's, the world's biggest hamburger chain, said fighting obesity requires "a more collaborative and comprehensive approach".

"Public health issues cannot be effectively addressed through a narrowly focused and misguided ban," Oldani said. She declined to say how much of McDonald's revenue comes from soft drinks, but Edward Jones analyst Jack Russo put it at around 5 percent.

The ban would apply to restaurants, mobile food carts, delicatessens and concessions at movie theaters, stadiums and arenas where sales of fountain drinks are common. It would not apply to convenience, grocery or drug stores, which mostly sell beverages in bottles and cans.

The proposal, which would exclude diet and dairy-based coffee drinks, must be approved by the city's Board of Health.

"You can still be a beast. We're not keeping you from eating fattening foods or drinking 32-ounce bottles of full-sugar drinks," Mayor Bloomberg told the All Things Digital gathering in Rancho Palos Verdes, California on Thursday via video conference. "We are just telling you that this is detrimental to your health and making you understand that by portion size."

Bloomberg's assault on super-sized sodas opened a new front in the battle over how local governments regulate in the name of health what people eat and drink.

Public health advocates who have been fighting America's growing obesity problem say portion control is key to weight management.

"There's very strong scientific evidence that when people are served more they eat more, or in this case drink more," said Kelly Brownell, director of Yale University's Rudd Center for Food Policy and Obesity. Brownell applauded the proposal.

"My guess is this will affect enough people in a strong enough way to create a pretty significant public health benefit," he said.

Dr Pepper Snapple Group Inc did not return a call for comment. PepsiCo Inc referred questions to the New York City Beverage Association, which characterized the proposal as zealous and unlikely to work.

"The city is not going to address the obesity issue by attacking soda because soda is not driving the obesity rates," said Stefan Friedman, an association spokesman.

INDUSTRY CHALLENGE

Beverage companies have several arguments on which to base possible legal challenges, including that the ban would affect interstate commerce by impacting supplies such as soda syrup and cups, said Marc Scheineson, a former associate commissioner at the U.S. Food and Drug Administration and head of the food and drug practice at the Washington, D.C. law firm Allston & Bird.

That argument could be outweighed by the city's interest in public health, he said.

Other Bloomberg initiatives to improve public health, such as forbidding smoking in restaurants and requiring chain restaurants to post calorie counts, were the subject of lawsuits, but the city prevailed.

Regardless of whether it mounts any legal challenges, the industry is likely to spend a lot of money fighting the proposal like it has fought ongoing efforts to tax soft drinks, said Tom Pirko of Bevmark Consulting.

"This is a challenge to the basic premise of their business plan, all predicated on selling sweet drinks in the largest volumes possible," Pirko said.

"New York is a mega-market, but more importantly it is New York. It sets the pace. What happens in New York has a strong influence on the rest of the country," he said.

Coke controls 70 percent of the U.S. fountain drink market, according to Beverage Digest, followed by Pepsi with 19 percent and Dr Pepper Snapple with 11 percent.

Fountain business accounts for about 24 percent of the 9.3 billion cases of soda sold a year, Beverage Digest said, in a market worth $75.7 billion.

Coke has been boosting its fountain business with its new Freestyle dispenser that lets customers pick from over 100 flavor combinations. It is unclear how the Freestyle machine would work if the ban passed, since diet drinks are not constrained.

"To me, it puts a really big wrench in that," said Moody's analyst Linda Montag.

Like draught beers, fountain sodas are often more profitable for suppliers than those sold in bottles and cans because they require less packaging and often have higher markups. That means the ban could constrain profits as well as sales.

"Maybe you make up for it in pricing. You can't sell as much anymore, but you up your price a little bit so it doesn't impact the company all that much," Montag said.

The proposal is to be submitted on June 12 to the New York City Board of Health, which will have a three-month comment period before voting on it.

If approved, the ban would take effect six months later and be enforced by the city's restaurant inspectors. Restaurant owners would have nine months after adoption of the ban before facing fines of $200 for violations, Bloomberg said.

(Additional reporting by Dhanya Skariachan, Edith Honan and Joseph Ax in New York, Susan Heavey in Washington, D.C. and Alexei Oreskovic in Rancho Palos Verdes, California; Editing by Maureen Bavdek, Sofina Mirza-Reid)

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Reuters: U.S.: Lockheed says Pentagon paperwork adds to overhead costs

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Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Lockheed says Pentagon paperwork adds to overhead costs
May 31st 2012, 23:34

By Andrea Shalal-Esa

WASHINGTON | Thu May 31, 2012 7:34pm EDT

WASHINGTON (Reuters) - Lockheed Martin Corp, the biggest U.S. weapons maker, on Thursday pushed back against the Pentagon's demands for ever more cost data, saying the requests were adding to the very overhead the government wants to see lowered.

Lockheed Chief Executive Bob Stevens said his company was working hard to drive down overhead, but the government's "should cost" initiative meant the company needed more people to generate thousands of pages of additional paperwork.

"The more the government asks us to do, the more pressure that puts on having the overheads," Stevens told an investor conference hosted by Sanford C. Bernstein.

"What won't work in my mind is an ever increasing set of demands by the government for more and more and more information and responsiveness, and an increasing expectation that the facilities that are available to meet those increasing demands ought to be reduced and reduced and reduced,"

Stevens' unusually blunt remarks came as negotiations between Lockheed and the Pentagon for a fifth batch of 32 F-35 Joint Strike Fighters dragged on for more than five months.

Lockheed is developing and building the next-generation F-35 fighter for the United States and eight development partners - Britain, Italy, Turkey, Denmark, Norway, Canada, Australia and the Netherlands - plus two other countries, Israel and Japan.

The Pentagon projects it will spend $396 billion to develop and buy 2,443 of the new radar-evading, supersonic warplanes, with projected operating and maintenance costs likely to drive the program's total lifetime cost to $1.51 trillion.

Stevens said Lockheed took the Pentagon's concerns about overhead costs very seriously and had already cut its executive ranks by 26 percent. It also remained focused "on every expense account, every capital request, every individual ...job that we have in the company, how to reduce and how to streamline."

But he said Lockheed was telling U.S. defense officials to be more focused in their requests for additional data.

"It falls a little bit into the domain of help us help you. If you want us to continue to focus on overhead reduction, then maybe we ought to look at how we work together with one another and exactly what is needed and be more specific and more tailored and more focused," he said.

Stevens said the company's cost-cutting efforts were also evident in its proposal for that contract, which came in lower than the fourth batch of planes, despite the Pentagon's decision to scale back projected order quantities that had eroded the discounts it was able to negotiate with suppliers, he said.

"When it gets flatter, it gets harder to take cost out of the program," Stevens said, adding that a strong affordability focus had still let Lockheed offer the government some savings.

He gave no details on the scope of the offered cost break.

TWO SIDES 'PRETTY FAR APART' ON F-35 CONTRACT

One source familiar with the program said the Pentagon was pushing Lockheed to agree to a 16 percent reduction from the fourth production contract, but the company had balked.

"The two sides are still pretty far apart," said the source, who was not authorized to speak on the record.

Stevens said the Pentagon's focus on what weapons programs "should cost" - as opposed to estimates focused on what they "would cost" - had resulted in increasing requests for more certified cost and pricing data.

Lockheed submitted 6,000 pages of data with its initial F-35 proposal, but had been required to generate an additional 7,000 pages of data for the negotiations in recent months, he said.

Stevens said more than 3,300 union workers remained on strike at the Fort Worth, Texas, plant where Lockheed builds the F-35. Production was continuing, but Lockheed might have to readjust its plan to produce 29 of the planes this year due to the strike, he said.

Paul Black, head of the local branch of the International Association of Machinists and Aerospace Workers, said the two sides remained at odds over the company's drive to end defined pension benefits for any new hires. No new talks were scheduled.

Lockheed's CEO reiterated his concern about an additional $500 billion in defense spending cuts due to take effect in January, on top of the $487 billion in cuts already being implemented over the next decade.

He said Lockheed might have to notify all its employees as early as September or October about impending layoffs, if U.S. lawmakers were unable to reverse the additional automatic cuts required under federal budget "sequestration."

He said the cuts would cause "enormous turbulence" and a "huge cascading bow wave" in the industry and among suppliers, triggering contract changes and pricing adjustments.

Stevens said Lockheed was focused on maintaining and expanding its profit margins, largely through cost-cutting measures and higher international sales, even as defense spending declined. He said Lockheed was fairly insulated against big changes resulting from troop reductions.

But the uncertainty and abruptness of sequestration still posed risks, he said.

(Editing by Jan Paschal and M.D. Golan)

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Reuters: U.S.: Family of New Jersey suicide rejects apology from former roommate

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Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Family of New Jersey suicide rejects apology from former roommate
May 31st 2012, 23:12

Dharun Ravi, a former Rutgers University student charged with bias intimidation, stands after hearing the verdict in his trial at the Superior Court of New Jersey in Middlesex County, New Brunswick, New Jersey March 16, 2012. Ravi, who spied on the sexual tryst of his roommate, who later committed suicide, was found guilty of hate crimes on Friday in a case that put a national spotlight on gay bullying. Ravi, 20, faces the possibility of 10 years in prison for using a webcam to watch roommate Tyler Clementi with another man in their dormitory room on September 19, 2010. REUTERS/Lucas Jackson

Dharun Ravi, a former Rutgers University student charged with bias intimidation, stands after hearing the verdict in his trial at the Superior Court of New Jersey in Middlesex County, New Brunswick, New Jersey March 16, 2012. Ravi, who spied on the sexual tryst of his roommate, who later committed suicide, was found guilty of hate crimes on Friday in a case that put a national spotlight on gay bullying. Ravi, 20, faces the possibility of 10 years in prison for using a webcam to watch roommate Tyler Clementi with another man in their dormitory room on September 19, 2010.

Credit: Reuters/Lucas Jackson

By Ellen Wulfhorst

NEW YORK | Thu May 31, 2012 7:12pm EDT

NEW YORK (Reuters) - Relatives of a Rutgers student who committed suicide after his roommate used a webcam to spy on his gay encounter rejected the roommate's apology on Thursday, calling it a work of "public relations" designed to counter his lack of remorse.

Dharun Ravi, who is serving a 30-day prison sentence, should have been given a stiffer punishment for his conviction in March in Middlesex County, New Jersey Superior Court on 15 charges, including invasion of privacy, bias intimidation and witness tampering, the family said in a statement.

Ravi used a computer-mounted webcam to look at an encounter in September 2010 in his room between his freshman roommate, Tyler Clementi, and another man and used social media in an unsuccessful attempt to encourage others to watch a second date between the two men.

Clementi, 18, jumped off the George Washington Bridge a few days later.

Ravi, 20, issued a statement this week apologizing for his "thoughtless, insensitive, immature, stupid and childish choices" but said he was not motivated by hatred or bigotry.

In response, Clementi's family said: "As to the so-called 'apology,' it was, of course, no apology at all, but a public relations piece produced by Mr. Ravi's advisers only after Judge (Glenn) Berman scolded Mr. Ravi in open court for his failure to have expressed a word of remorse or apology."

"His press release did not mention Tyler or our family, and it included no words of sincere remorse, compassion or responsibility for the pain he caused," said the statement issued by the family's attorney.

The Clementi family said it did not seek a harsh punishment for Ravi but was "troubled" by the judge's failure to impose even a short jail sentence on several of the charges.

The judge sentenced Ravi to 30 days in jail, three years of probation, counseling and community service. His most serious convictions typically carry a sentence of five to 10 years in state prison.

The sentencing "missed a valuable opportunity to reinforce the message that our society takes these types of crimes seriously, and that we will act decisively to protect individuals' privacy and human dignity," the family said.

Ravi began serving his sentence on Thursday, the local sheriff's office said. Although Clementi's suicide overshadowed the case, Ravi was not charged with playing any role in his roommate's death.

Middlesex County prosecutors have appealed the sentence, saying it was too lenient. The appeal meant the start of the sentence could have been delayed, but Ravi chose otherwise.

(Editing by Greg McCune and Cynthia Osterman)

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Reuters: U.S.: U.S. prosecutor in Swiss tax probe to exit

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Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
U.S. prosecutor in Swiss tax probe to exit
May 31st 2012, 22:00

By Lynnley Browning

Thu May 31, 2012 6:00pm EDT

(Reuters) - The U.S. prosecutor most responsible for piercing the veil of Swiss bank secrecy has resigned, but tax experts said his exit was unlikely to slow Justice Department efforts to rein in American offshore tax evasion there.

Kevin Downing, 46, who for several years has led the department's criminal probe of the Swiss banking industry, will leave effective June 4 to become a partner at a major law firm, a source familiar with the matter said on Thursday.

The source would not identify the law firm, but tax lawyers said Downing, with 15 years at the Justice Department, has had offers from several major law firms over the years.

Scott Michel, a tax lawyer at Caplin Drysdale in Washington, D.C., called Downing "one of the most important and impactful tax prosecutors in the country in the last 15 years." Michel credited Downing, along with other Tax Division lawyers and special agents from the IRS's Criminal Investigation Unit, as having almost single-handedly penetrated "the decades-old wall of Swiss bank secrecy."

Scrutiny of Swiss banks by the Justice Department and the Internal Revenue Service has intensified. Eleven banks, including Credit Suisse AG, are under criminal investigation. Dozens of Swiss private bankers and their American clients have been indicted in recent years.

Peter Hardy, a former federal prosecutor who is now at Post & Schell, a law firm in Philadelphia, said that while Downing's departure "might seem to take some of the air out of the offshore evasion campaign, it's far enough along at this point that it has a life of its own. It's his legacy."

NEGOTIATIONS STALL

Negotiations with Swiss officials appear to have stalled in recent months over whether some of the 11 Swiss banks should be forced into deferred-prosecution agreements. Swiss officials want a global, civil settlement for the more than 300 banks in the Swiss banking sector, with no more criminal dispositions.

Mario Tuor, a spokesman of the State Secretariat for International Financial Matters in Zurich, declined to comment on Downing's departure.

Tax lawyers and sources briefed on the matter said Downing's departure for the more lucrative private sector was not prompted by any dissatisfaction with the pace of the negotiations.

Downing's functional replacement is expected to be Mark Daly, a trial attorney for the Northern Criminal Enforcement Section of the Justice Department's tax division, government sources said. Daly has played a growing, behind-the-scenes role in the scrutiny of Swiss banks, the sources said. Daly did not return calls requesting comment.

Eileen O'Connor, head of the Justice Department's tax division from 2001-2007, described Downing as "dynamite but more vigorous than some defense attorneys were comfortable with". O'Connor, now in private practice at Pillsbury Winthrop Shaw Pittman in Washington, D.C., promoted Downing to his current job of senior litigation counsel.

UBS CASE

Stephen Kohn, executive director of the National Whistleblower Center, said Downing was "hostile toward whistleblowers" and considered his client, former UBS AG private banker Bradley Birkenfeld, "merely a tipster" rather than a key to unlocking the case against UBS.

Birkenfeld provided information about the bank's dealings with tax-evading clients and exposing what Downing later called in court papers a "massive tax fraud scheme" at the bank.

In 2005, under Downing's direction, UBS entered into a deferred-prosecution agreement and paid a $780 million fine for tax-evasion services sold through its private bank to wealthy Americans. In January 2010, Birkenfeld began serving a 40-month prison term in Pennsylvania for admitting to conspiracy in helping a former wealthy client, California property billionaire Igor Olenicoff, conceal large sums at UBS.

Downing joined the Justice Department in 1997, and first made his name by leading the investigation of banks, accounting firms and law firms that sold bogus tax shelters to retail investors. Under his direction, that probe culminated in a deferred-prosecution agreement with KPMG, a Big Four accounting firm, in 2005. KPMG averted indictment by admitting to criminal wrongdoing and paying a $456 million fine. Last February, also under Downing's supervision, Wegelin & Co, Switzerland's oldest private bank, was charged with enabling wealthy Americans to evade taxes on at least $1.2 billion hidden in offshore bank accounts.

(Reporting By Lynnley Browning in Fairfield, Conn.; Additional reporting by Andrew Thompson in Zurich; Editing by Howard Goller and Andrew Hay)

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